New Jersey: Judge to oversee mortgage foreclosure process

By Samantha Henry Associated Press TRENTON, N.J. (AP) -- A judge appointed a special overseer Tuesday to ensure that foreclosure proceedings in the state of New Jersey conform to the law. The move comes after state Supreme Court Chief Justice Stuart Rabner in December ordered six of the nation's biggest mortgage lenders to show why their foreclosure operations shouldn't be suspended in New Jersey over reports of widespread irregularities. General Equity Judge Mary C. Jacobson, who was designated by Rabner to oversee foreclosure matters in the state, ruled Tuesday to adopt a stipulation requiring the lenders to follow a series of regulations that Jacobson said would safeguard the foreclosure process. Jacobson also appointed former New Jersey Superior Court Judge Richard Williams as a "special master" to make sure the lenders and service providers comply. Rabner said in December that the legal review was intended to provide greater confidence that the tens of thousands of residential foreclosure proceedings under way in New Jersey are based on reliable information. The New Jersey courts took the action after a report was submitted to the Supreme Court that cited depositions and court filings in other states and described in stances where employees, some of them not trained for the jobs they were performing, signed hundreds of foreclosure documents a day without checking them for accuracy. The so-called "robo-signing" has been blamed for numerous cases nationwide in which homeowners have been the mistaken target of foreclosures when they actually were up to date on their mortgages. The lenders and service providers targeted by the court order were OneWest Bank, formerly IndyMac Federal Bank; BAC Home Loan Servicing, a subsidiary of Bank of America; JP Morgan Chase's Chase Home Finance; Wells Fargo Financial New Jersey and CitiResidential Living, a subsidiary of Citibank. All six lenders, in objecting to the stipulation, claimed they reviewed their procedures and made improvements in training, monitoring and quality control well before New Jersey's court order, according to court filings. The six were selected because they processed nearly 30,000 foreclosures in New Jersey in 2010, almost half the 65,000 filed in the state. That is triple the total number from four years earlier, Rabner said in December. Jacobson said her ruling Tuesday was to ensure that the overall process is done correctly and to guard against things like robo-signing, lenders filing affidavits without the subject present, or vouching for incorrect information. "The scope of this hearing is not to look at individual cases," Jacobson said, adding that there were courts for foreclosure victims to file grievances. "It is to look at the source of the document creation, and ensure that these documents were created by a process that conforms to the law." Advocates from a variety of organizations attended Tuesday's hearing to argue that the judge's actions didn't go far enough in helping homeowners entangled in foreclosure. "We find in 2011 that more and more homes are in foreclosure," said Kathleen Witcher, a representative from the Irvington, N.J. chapter of the NAACP who protested outside Tuesday's hearing. "People whose dream was home ownership, that dream is now deferred." Published: Thu, Mar 31, 2011